December 9, 2015
The U.S. Securities and Exchange Commission (SEC) has approved an S-3 filing for online retailer Overstock.com to issue new publicly traded shares of the company on the bitcoin blockchain, as shared by the Bitcoin Magazine. Overstock will issue an official statement in the next 48 hours.
According to SEC, Form S-3 is a securities registration form that simplified the process for issuing publicly traded securities. For filing Form S-3 companies have to reach a certain level of compliance with the Securities Exchange Act of 1934 and have at least 12 months of properly filed reports with the SEC.
The tØ platform by Overstock was launched in April 2014 to leverage blockchain for equity trades and settlement. In July 2015, Overstock announced the sale of a $5-million digital security in the form of a cryptobond to FNY Managed Accounts LLC, an affiliate of FNY Capital. The sale was intended to serve as an additional proof-of-concept of the safety and efficiency of exchanging financial instruments via a cryptographically secured public ledger.
A month later, in August 2015, tØ acquired Wall Street brokerage firm SpeedRoute for $30.3 million. As CEO Patrick Byrne commented on the deal at that time, It’s a routing service that is connected to all 11 exchanges and 25 dark pools in the United States, it’s a very significant node within the national market already. We knew that we wanted to bring the blockchain to Wall Street and rather than build it in isolation and try to get people to adopt it, if we bought a node within the national market system and then built the crypto on top of it so it was all regulatory compliant and speaks the technology of FinTech. We didn’t want to be a Mt.Gox trying to build something and sneak it past the regulators.
As tØ states on the official website, The trade is the settlement. Normally, trades are settled within three days, but blockchain cuts the trade settlement to the moment of the trade. The great advantage of blockchain is instant settlement of transactions.
The tØ platform is coloring coins to allow the fractions of bitcoins to be used for tracking the ownership over assets. Bitcoin Magazine brought another use case where a colored coin could be used as a token to prove that an individual owns certain shares of Overstock. This technology is built on top of the bitcoin blockchain and is secured by the distributed public ledger.
Proof of ownership is one of the three ways tØ differentiates the platform. Another way is transparency since all tØ technologies are built upon decentralized, cryptographically protected ledgers, which anybody can access and inspect. This ensures fairness to the entire market, without regard for size or geographic location, as the company states on the official website. The third differentiator is regulatory compliance as tØ recognizes its obligation to blaze their trail as transparently as the technology they are developing.